Synopsis

The petitioner, a consortium, was declared the successful L1 bidder for a tender issued by the Transport Department, GNCTD for operation and maintenance of a vehicle inspection centre. After issuance of the Letter of Acceptance (LoA), the department received a complaint about the conduct of one consortium member (M/s Naman Electronics) in Gujarat, where its licence had been cancelled for malpractices and an FIR had been registered. The department issued a show cause notice, conducted an inquiry, and cancelled the tender, also revoking the LoA. The petitioner challenged the cancellation before the High Court. The Court dismissed the petition, holding that the non‑disclosure of material facts regarding the earlier cancellation and investigation violated the tender conditions, and the cancellation was neither arbitrary nor mala fide.

Court: High Court of Delhi
Coram: V. Kameswar Rao & Manmeet Pritam Singh Arora, JJ.
Date: March 24, 2026
Core Law: Public Procurement, Tender Law, Article 226, Contract Law

2. Legal Framework

• Constitution of India: Article 226 – writ jurisdiction to review administrative actions.

• Public Procurement Principles: Transparency, fairness, non‑arbitrariness, and the right of the employer to reject bids or cancel tenders for valid reasons, especially where the bidder has suppressed material information.

• Tender Conditions: Clause 3 of the subject tender required the bidder to submit an undertaking that no member of the consortium was under investigation or charge‑sheeted by any government agency in respect of a similar project.

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